Cars are a depreciating asset

[George Cantstandya]

(02-12-2019, 06:50 PM)grampahol Wrote: ...Now, if you have available credit on a credit card that's almost money in the bank for buying a used car. Finance your used car with a credit card...

Haha, certainly not money in the bank and really the opposite.  More like pissing your money away. Credit cards have interest rates well and above most decent normal auto loans even for people with low average credit.  Also credit cards use compound interest which means you'll end up paying interest on interest where auto loans are generally simple interest. So if you use a credit card you'll end up paying a hell of a lot more for the car in the end.  If you are considering the advice above, using a credit card, in hope that your car can't be repossessed when you default, you have no business financing a car to start with.  You'll either end up paying a lot more than you should over the term of financing as opposed to a standard car loan or bankrupt with no ability to get further credit for many years when you default and the credit card company comes after your ass.

Best advice I can give is not to finance a car above your means. Consider the length of the loan and your ability to make those payments over that period.  The last thing you want to be is car poor where you have a nice car but can't afford to save for your future and pay for nice things like traveling, entertainment, good food and such as well as being car poor where you can barely pay your mortgage or rent.  Also factor in unknowns like what will happen if for some reason you lose income for a significant period of time or if other financial emergencies occur.  How long will you be able to make those payments in that situation before you can recover?  If you can't afford to make at least 6 to 8 months of payments should you lose your job or suffer other financial hardships then reconsider.

Edit: The only time I would think of using my CC to buy a car/make a down payment would be if I was planning to pay cash anyway and only for the reward points. In that case I'd pay it off from my checking account as soon as I got home. That way it would be the same as I wrote a check but I get the CC rewards also. I actually never thought of that so a good idea for when I get my next car. However I wonder if many dealers accept CCs for payments given all the credit card fraud going on these days. I suppose I could make it work having them contact my bank and such to verify.